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Informist, Tuesday, Jan. 28, 2025

 

NEW DELHI – Food Corp. of India lost 53,000 tonnes of foodgrain worth INR 1.68 billion in transit during Apr-Dec. So far in 2024-25 (Apr-Mar), FCI has lost 0.17% of the 30.8 million tonnes of foodgrains transported from surplus to deficit states. 

 

The government has set a benchmark for transit losses for foodgrains at 0.2% in FY25, as per the government's memorandum of understanding with the corporation. According to FCI, transit losses majorly occur due to moisture and temperature variations, multiple handling, spillages, poor railway infrastructure, and en-route theft, among others.

 

Three decades ago, transit losses were nearly 2.0%, and a decade back it was 0.4%, FCI data showed. In 2023, FCI introduced tamper-proof, high-security cable seals to combat theft and pilferage during transport and brought down transit losses to 0.16% last year. 

 

Experts have been urging the government to shift towards direct benefit transfer for better efficiency and accountability in distributing food subsidies. "By transferring subsidies directly to the beneficiaries' bank accounts, DBT (direct benefit transfer) minimises leakage, reduces administrative costs, and ensures that the intended recipients receive full benefits," according to the Indian Council for Research on International Economic Relations. 

 

The economic cost of rice and wheat for 2024-25 were INR 39.75 per kg and INR 27.74 per kg, respectively. Economic cost consists of procurement and distribution costs, including packing, transportation, and storage costs. 

 

STORAGE GAINS

Though the agency is making transit losses, it is booking storage gains. As of December, the foodgrain storage gain was 37,000 tn or 0.06% of the 57.3 million tonnes kept in godowns, the data showed. From 2014-15, FCI storage losses are nil. Instead, it has been making storage gains on account of weight gained during storage. Wheat being hygroscopic tends to gain weight whereas rice loses moisture, resulting in weight loss, according to the agency.

 

 

"During last years, the average offtake has increased due to additional allocation under the PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) scheme, which has resulted in shorter storage period, thus losses reduced," the government said in the MoU. Launched during the COVID-19 pandemic, the Pradhan Mantri Garib Kalyan Anna Yojana scheme provides 813 million poor food grains free of cost and is extended till December 2028. 

 

 

The lion's share of food subsidy goes to fund FCI operations. In the Union Budget 2024-25, the government's food subsidy bill was INR 2.05 trillion and INR 1.47 trillion was allocated to the corporation. In 2025-26, the government has estimated the food subsidy bill to increase by about 5% for 2025-26 to nearly INR 2.15 trillion, according to media reports.  End

 

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

 

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